You’ve probably heard of the Bitcoin Halving that, like the Olympics, happens every four years – but have you heard of Litecoin Halving?
Litecoin, one of the world’s oldest circulating cryptocurrencies, will go through its very own ‘halving’ event in August 2023. The Bitcoin Halving, despite being a year away, is already generating chatter among the crypto community due to expectations that it could be ‘bullish’ to Bitcoin’s price. The Litecoin Halving is thus similarly viewed as one that would result in a price hike.
In this article, we will briefly talk about Litecoin, what Litecoin Halving is, and why it is a significant event that investors and many in the crypto community look forward to.
What Is Litecoin?
Litecoin (LTC) is a cryptocurrency created by Charlie Lee in 2011, two years after the first Bitcoin was mined. Lee, a graduate at MIT and former engineer at Google, says he created Litecoin at the time to solve the problems of fairness and ‘ninja mining’ in crypto, where a coin is “released silently to friends and family” before being released to the public.
Litecoin is a fork of Bitcoin’s blockchain network, meaning that Litecoin is based on Bitcoin’s source code, with a few tweaks.
Litecoin describes itself as “decentralised money”, that is “free from censorship and open to all.” Like Bitcoin, Litecoin operates on a Proof-of-Work (PoW) consensus mechanism to validate transactions on its blockchain network.
Users can purchase Litecoin on major crypto exchanges such as Binance, Coinbase, Kraken, and several other Australian exchanges. At the time of writing, there are over 73 million Litecoins in circulation at a price of around US$91 (AU$139) each. This means Litecoin currently has a market cap of over US$6.69 billion (AU$10.3 billion).
Litecoin Halving: When, where how
Similar to Bitcoin, Litecoin’s supply is limited. There will only ever be 84 million Litecoin in existence. This is in order to retain the cryptocurrency’s value by scarcity. How does Litecoin go about enforcing scarcity? By going through a process called halving.
Halving is when the block reward for miners gets cut in half. As Litecoin uses PoW to validate crypto transactions, people (in this case, they’re called miners) who successfully validate a transaction onto a block and thus add new Litecoins into circulation, are rewarded with LTC and other fees as incentive.
The first Litecoin Halving event occurred on August 25, 2015. At the time, the block reward to miners was cut from 50 LTC to 25 LTC.
The second occurred on August 5, 2019. At the time, the block reward to miners was reduced from 25 LTC to 12.5 LTC. So, the upcoming Litecoin Halving will be the third, and it is expected to happen around August 5, 2023. The block reward will be halved to 6.25 LTC.
The ‘halving’ will keep occurring every four years until the block reward goes to zero, with the final Litecoin Halving scheduled to occur around the year 2142. As of December 2022, there are 13 million Litecoins left to mine.
Why Is Litecoin Halving Important?
Halving events are much anticipated in the crypto space. This is because it is widely viewed as a hedge against inflation. Halving makes Litecoin a deflationary cryptocurrency like Bitcoin. Unlike fiat currencies where printing money causes inflation, total supply of Litecoin is capped at 84 million, no more, no less, making it an asset due to scarcity.
Historically, Bitcoin Halving events have contributed to significant price jumps for BTC. According to Coingecko, in May 2020 Bitcoin’s price surged 40% in the buildup to the halving. Post-halving, Bitcoin’s price rose three times its previous all-time-high to a peak of US$67,000 (AU$102,600).
For Litecoin, the cryptocurrency saw an increase in price days prior to past halving events. According to Bitdegree, after the first halving LTC increased from around US$2.99 (AU$4.58) to US$3.50 (AU$5.36) to US$4.00 (AU$6.12).
So, based on past price action, the upcoming Litecoin Halving is expected to have a positive impact on Litecoin’s price. At the time of writing, we have 65 days to go until the next halving. If you have yet to personally witness a halving event, sites like this are where you could go for the Litecoin Halving countdown.
